fbpx

Avoiding ACA Penalties

September 1, 2024

Avoid Falling into Non-Compliance Traps

On February 24th, 2020, the IRS issued a “Field Notice” clarifying that there’s no expiration period for levying an Employer Shared Responsibility Payment (ESRP) as outlined in Section §4980H of the Internal Revenue Code. This announcement underscores that employers who once hoped to bypass ACA reporting requirements, anticipating that these obligations might eventually be phased out, are instead indefinitely accountable.

Employers recognized as Applicable Large Employers (ALEs), with a workforce of 50 or more full-time employees, are mandated to provide Minimum Essential Coverage that meets the Minimum Value to at least 95% of their full-time staff. The revelation from the IRS signifies the critical importance of full compliance with ACA mandates. Unlike the typical “3 to 7 year” timeframe associated with standard audits and tax filings under section code §6501, such leniencies do not extend to ACA compliance.

This indefinite liability for ESRP underlines the necessity for businesses to stay vigilant and proactive in their compliance efforts. Ignorance or negligence towards ACA obligations could result in unforeseen financial burdens that could have been avoided with due diligence. The IRS’s stance makes it clear that compliance is not transient but an ongoing priority. Therefore, employers must regularly review their policies and procedures to ensure alignment with ACA requirements, leveraging expert advice and tools wherever necessary. This approach not only safeguards against penalties but also reinforces a commitment to the well-being of their workforce.

share this blog

STAY CONNECTED

Sign up for our newsletter for the latest Tesseon information.

Newsletter

Related Blogs

What our clients are saying about us

Disclaimer: The information provided on this blog page is for general informational purposes only and should not be considered as legal advice. It is advisable to seek professional legal counsel before taking any action based on the content of this page. We do not guarantee the accuracy or completeness of the information provided, and we will not be liable for any losses or damages arising from its use. Any reliance on the information provided is solely at your own risk. Consult a qualified attorney for personalized legal advice.

Scroll to Top